Mountain Province Diamonds Announces Third Quarter and Nine Months Ended September 30, 2021 Results
Second Highest Quarterly Revenue and Adjusted EBITDA in Company HistoryTORONTO Nov. 9, 2021 - Mountain Province Diamonds Inc. ("Mountain Province", the "Company") (TSX: MPVD) (OTCQX: MPVD) today announces its financial and operating results for the third quarter ("Q3 2021") and nine months ended September 30, 2021. All figures are expressed in Canadian dollars unless otherwise noted.
Operational Highlights for Third Quarter 2021 ("Q3 2021")
- 832,000 tonnes treated, a 1% increase from the 821,000 tonnes treated in Q3 2020.
- 1,562,000 carats recovered at an average grade of 1.88 carats per tonne, a 13% decrease compared to the 1,795,000 carats recovered at 2.19 carats per tonne of Q3 2020.
- 10,280,000 total tonnes mined, a 4% increase from 9,884,000 total tonnes mined in Q3 2020.
Financial Highlights for Third Quarter 2021 ("Q3 2021")
- Revenue from 1,027,000 carats sold at $94.2 million (US$74.1 million) at an average realised value of $92 per carat (US$72) compared to $47.3 million from 956,000 carats sold in Q3 2020 (US$35.3 million) at an average realized value of $50 per carat (US$37). Third quarter revenue of 2021 represents the second highest quarterly revenue in the company's history.
- Adjusted EBITDA1 of $41.2 million compared to $15.3 million in Q3 2020 Third quarter adjusted EBITDA of 2021 represents the second highest quarterly adjusted EBITDA in the company's history.
- Earnings from mine operations $35.5 million compared to a loss from mine operations of $2.2 million in Q3 2020.
- Cash costs of production, including capitalized stripping costs1 of $101 per tonne treated (2020: $95 per tonne) and $54 per carat recovered (2020: $44 per carat).
- Net income at September 30, 2021 was $8.8 million or $0.04 earnings per share (2020: net loss $6.5 million or $0.03 loss per share). Included in the determination of the net income at September 30, 2021 are unrealized foreign exchange losses of $9.9 million, on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange losses are a result of the weakening of the Canadian dollar versus US dollar.
| 1 Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS. See the Non-IFRS Measures section of the Company's September 30, 2021 MD&A for explanation and reconciliation. |
Operational Highlights for the nine months ended September 30, 2021
- 24.6 million total tonnes mined, an 6% decrease from comparable period (September 30, 2020: 26.1 million tonnes).
- 2,269,000 tonnes of ore treated; a 10% decrease from comparable period (September 30, 2020: 2,510,000 tonnes.
- 4,718,000 carats recovered at an average grade of 2.08 carats per tonne, (September 30, 2020: 4,997,000 carats and 1.99 carats per tonne).
Financial Highlights for the nine months ended September 30, 2020
- Total sales revenue of $213.2 million (US$169.4 million) at an average realised value of $91 per carat (US$72) compared to $146.8 million in 2020 (US$109.5 million) at an average realized value of $62 per carat (US$46).
- Adjusted EBITDA2 of $98.2 million compared to $14.2 million for the nine months ended September 30, 2020.
- Earnings from mine operations of $82.1 million (2020: loss from mine operations $24.3 million).
- Cash costs of production, including capitalized stripping costs2, of $110 per tonne treated (2020: $100 per tonne) and $53 per carat recovered (2020: $50 per carat).
- Net income at September 30, 2021 was $35.5 million or $0.18 earnings per share (2020: net loss $74.3 million or $0.35 loss per share). Included in the determination of the net loss for the nine months ended September 30, 2021 are unrealized foreign exchange gains of $0.4 million, on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange gains are a result of the strengthening of the Canadian dollar versus US dollar.
- Capital expenditures were $27.3 million, $17.6 million of which were deferred stripping costs, with the remaining $9.7 million accounting for sustaining capital expenditures related to mine operations.
- Quarter end cash position of $42.5 million (December 31, 2020: $35.2 million) and a net working capital of $91.6 million (December 31, 2020: $52.8 million).
| 2Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS. See the Non-IFRS Measures section of the Company's September 30, 2021 MD&A for explanation and reconciliation. |
Market Highlights
As previously disclosed, during the third quarter of 2021, 1,028,327 carats were sold for total proceeds of $93.9 million (US$74.1 million) resulting in an average value of $91 per carat (US$72 per carat). This compares to 718,549 carats sold at an average value of $90 per carat (US$73 per carat) for total proceeds of $64.7 million (US$52.6 million) in Q2 2021. This brings year-to-date sales to 2,349,644 carats, for total proceeds of $212.5 million (US$169.4 million) resulting in a year-to-date average value of $90 per carat (US$72 per carat).
The positive market environment which began early in the year persisted through the third quarter, resulting in strong price growth across all size classes. Indexed on a like-for-like basis, the Company is now achieving sales prices 47% above its pre-Covid benchmark of February 2020. As global economies continue to recover and the Covid-19 pandemic becomes less restrictive, consumer confidence heading into the important holiday retail buying season is expected to strengthen, further supporting price growth in the Diamond industry. Additionally, supply-demand dynamics are expected to favour the company as volumes sold by industry majors remain at multi-year lows.
Jonathan Comerford, the Company's Chairman and Interim Chief Executive Officer, commented:
"We're extremely pleased to report the strong third quarter operating and financial results. With the mine returning to peak efficiency levels and the diamond market exceeding pre-Covid levels, the company is on a strong footing as we enter 2022. With our new incoming CEO Mark Wall at the helm, we're looking forward to taking full advantage of the strong rebound in the diamond market, with our Gahcho Kué Diamonds in a great position to fill the gap that the Argyle Mine closure has left.
As we head into the end of the year with a good amount of cash in the bank, and an improved financial outlook backstopped by the strong performance we're seeing at the mine, we have many more options available to us than before as we explore ways to streamline the balance sheet, as we work with our supportive and constructive bondholders.
We believe that Mountain Province Diamonds is exiting a challenging time for the diamond industry as a whole. With the Covid-19 overhang on the industry slowly fading, supply and demand dynamics are expected to continue to tilt in our favour, to the benefit of all of our stakeholders."
Gahcho Kué Mine Operations
The following table summarizes key operating statistics for the Gahcho Kué Mine in the three and nine months ended September 30, 2021 and 2020.
| Three months ended | Three months ended | Nine months ended | Nine months ended | ||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||
| GK operating data | |||||||||
| Mining | |||||||||
| *Ore tonnes mined | kilo tonnes | 1,034 | 890 | 2,542 | 2,447 | ||||
| *Waste tonnes mined | kilo tonnes | 9,246 | 8,994 | 22,092 | 23,627 | ||||
| *Total tonnes mined | kilo tonnes | 10,280 | 9,884 | 24,634 | 26,074 | ||||
| *Ore in stockpile | kilo tonnes | 542 | 165 | 542 | 165 | ||||
| Processing | |||||||||
| *Ore tonnes processed | kilo tonnes | 832 | 821 | 2,269 | 2,510 | ||||
| *Average plant throughput | tonnes per day | 9,244 | 8,924 | 8,311 | 9,061 | ||||
| *Average diamond recovery | carats per tonne | 1.88 | 2.19 | 2.08 | 1.99 | ||||
| *Diamonds recovered | 000's carats | 1,562 | 1,795 | 4,718 | 4,997 | ||||
| Approximate diamonds recovered - Mountain Province | 000's carats | 765 | 880 | 2,312 | 2,449 | ||||
| Cash costs of production per tonne of ore, net of capitalized stripping ** | $ | 80 | 73 | 93 | 86 | ||||
| Cash costs of production per tonne of ore, including capitalized stripping** | $ | 101 | 95 | 110 | 100 | ||||
| Cash costs of production per carat recovered, net of capitalized stripping** | $ | 43 | 34 | 45 | 43 | ||||
| Cash costs of production per carat recovered, including capitalized stripping** | $ | 54 | 44 | 53 | 50 | ||||
| Sales | |||||||||
| Approximate diamonds sold - Mountain Province*** | 000's carats | 1,027 | 956 | 2,349 | 2,372 | ||||
| Average diamond sales price per carat | US | $ | 72 | $ | 37 | $ | 72 | $ | 46 |
| * at 100% interest in the Gahcho Kué Mine |
| **See Non-IFRS Measures section of the Company's September 30, 2021 MD&A for explanation and reconciliation |
| ***Includes the sales directly to De Beers for fancies and specials acquired by De Beers through the production split bidding process |
Financial Performance
| Three months ended | Three months ended | Nine months ended | Nine months ended | ||
| (in thousands of Canadian dollars, except where otherwise noted) | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Sales* | $ | 94,208 | 47,337 | 223,579 | 146,787 |
| Carats sold | 000's carats | 1,027 | 956 | 2,349 | 2,372 |
| Average price per carat sold | $/carat | 92 | 50 | 95 | 62 |
| Cost of sales per carat** | $/carat | 57 | 52 | 60 | 72 |
| Earnings from mine operations per carat | $ | 35 | (2) | 35 | (10) |
| Earnings from mine operations | % | 38% | -5% | 37% | -16% |
| Selling, general and administrative expenses | $ | 3,106 | 3,392 | 8,391 | 9,679 |
| Operating income | $ | 30,137 | (5,712) | 69,425 | (37,168) |
| Net income (loss) for the period | $ | 8,764 | (6,532) | 38,548 | (74,263) |
| Basic and diluted income (loss) per share | $ | 0.04 | (0.03) | 0.18 | (0.35) |
| * In the nine months ended September 30, 2021, the sales figure includes $10,399 of upside profit related to the Dunebridge diamonds which were sold by Dunebridge to third parties. |
| ** This cost of sales per carat includes the cost of acquiring 51% of the fancies and specials which have been sold, after having been won in a tendering process with De Beers Canada. |
Conference Call
The Company will host its quarterly conference call on Wednesday, November 10th, 2021 at 11:00am ET.
Title: Mountain Province Diamonds Inc. Q3 2021 Earnings Conference Call
Conference ID: 70256121
Date of call: November 10th, 2021
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes
Webcast Link:
https://produceredition.webcasts.com/starthere.jsp?ei=1505701&tp_key=98f29d2354
Participant Toll-Free Dial-In Number: (+1) 888-390-0546
Participant International Dial-In Number: (+1) 416-764-8668
A replay of the webcast and audio call will be available on the Company's website.
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About the Company
Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in Canada's Northwest Territories. The Gahcho Kué Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls 106,202 hectares of highly prospective mineral claims and leases that surround the Gahcho Kué Joint Venture property that include an indicated mineral resource for the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites.
For further information on Mountain Province Diamonds and to receive news releases by email, visit the Company's website at www.mountainprovince.com.
Qualified Person
The disclosure in this news release of scientific and technical information regarding Mountain Province's mineral properties has been reviewed and approved by Matthew MacPhail, P.Eng., MBA, and Tom E. McCandless, Ph.D., P.Geo., both employees of Mountain Province Diamonds and Qualified Persons as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects.
Caution Regarding Forward Looking Information
This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian and United States securities laws concerning the business, operations and financial performance and condition of Mountain Province Diamonds Inc. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to operational hazards, including possible disruption due to pandemic such as COVID-19, its impact on travel, self-isolation protocols and business and operations, estimated production and mine life of the project of Mountain Province; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; the future price of diamonds; the estimation of mineral reserves and resources; the ability to manage debt; capital expenditures; the ability to obtain permits for operations; liquidity; tax rates; and currency exchange rate fluctuations. Except for statements of historical fact relating to Mountain Province, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "anticipates," "may," "can," "plans," "believes," "estimates," "expects," "projects," "targets," "intends," "likely," "will," "should," "to be", "potential" and other similar words, or statements that certain events or conditions "may", "should" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Mountain Province and there is no assurance they will prove to be correct.
Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include the development of operation hazards which could arise in relation to COVID-19, including, but not limited to protocols which may be adopted to reduce the spread of COVID-19 and any impact of such protocols on Mountain Province's business and operations, variations in ore grade or recovery rates, changes in market conditions, changes in project parameters, mine sequencing; production rates; cash flow; risks relating to the availability and timeliness of permitting and governmental approvals; supply of, and demand for, diamonds; fluctuating commodity prices and currency exchange rates, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated.
These factors are discussed in greater detail in Mountain Province's most recent Annual Information Form and in the most recent MD&A filed on SEDAR, which also provide additional general assumptions in connection with these statements. Mountain Province cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Mountain Province believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release.
Although Mountain Province has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Mountain Province undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered as the property is developed.
Further, Mountain Province may make changes to its business plans that could affect its results. The principal assets of Mountain Province are administered pursuant to a joint venture under which Mountain Province is not the operator. Mountain Province is exposed to actions taken or omissions made by the operator within its prerogative and/or determinations made by the joint venture under its terms. Such actions or omissions may impact the future performance of Mountain Province. Under its current note and revolving credit facilities Mountain Province is subject to certain limitations on its ability to pay dividends on common stock. The declaration of dividends is at the discretion of Mountain Province's Board of Directors, subject to the limitations under the Company's debt facilities, and will depend on Mountain Province's financial results, cash requirements, future prospects, and other factors deemed relevant by the Board
SOURCE Mountain Province Diamonds Inc.
Contact
Matthew MacPhail, VP Corporate Development & Technical Services, 161 Bay Street, Suite 1410, Toronto, Ontario M5J 2S1, Phone: (416) 361-3562, E-mail: info@mountainprovince.com